United States: New York 2016 Legislative Session Wrap Up

The New York state legislature closed out its 2016 legislative session in the early morning hours on Saturday. Although the legislature came up short on a number of big-ticket items, such as comprehensive legislative ethics reform, an effort to bring ridesharing to upstate New York, and a replacement for New York City's 421-a tax program, a number of significant legislative accomplishments were, in typical fashion, finalized in the closing hours of this year's legislative calendar.

Opioid addiction

New York, like the rest of the country, has been grappling with an opioid/heroin epidemic that has impacted communities across the state. In the past, legislative leaders and the Governor had publicly expressed their desire to find a legislative response to the crisis. The deal that was struck at the end of session resulted in a package of three bills designed to address the problem. The bills would reduce to 7 from 30 the number of days an opioid can be initially prescribed to an individual, would place a 72-hour involuntary hold for incapacitated individuals, and would require no prior authorization from commercial insurers or Medicaid for those medications used to treat addiction. The package of legislation would also increase to 14 from 7 the number of days that a patient can go for treatment without prior approval from his or her health insurance carrier and would make it easier for patients to obtain opioid substitutes, such as Suboxone.

Daily fantasy sports

After days of intense lobbying in the halls of the State Capitol, the legislature passed a bill in the final hours of this year's session regulating daily fantasy sports. The legislation allows companies such as DraftKings and FanDuel to once again operate in the state following a lawsuit from state Attorney General Eric Schneiderman (D) that resulted in suspension of their operations. The legislation establishes that daily fantasy sports are a game of skill, thereby placing them outside the state's constitutional restrictions on gambling. The legislation imposes a 15 percent tax on the revenue generated from in-state participants, with the revenue generated earmarked for the New York Lottery's Education Fund. The daily fantasy sports companies would also be required to register with the State of New York every three years to operate in the state. While Governor Andrew Cuomo has not yet indicated whether he intends to sign the legislation, it has been reported that his office was involved in negotiating the final bill language.

Campaign finance

Although the state legislature fell far short of delivering the major ethics overhaul that many were hoping for following the arrest and conviction of former Assembly Speaker Sheldon Silver (D) and Senate Majority Leader Dean Skelos (R), lawmakers did pass a bill addressing the state's campaign finance system and lobbying law.

The legislation takes aim at independent expenditure organizations and super PACs, which will now be subject to new rules clarifying and limiting their activities on behalf of candidates. In particular, the legislation codifies the activities that constitute illegal coordination between independent expenditure committees and the candidates they support. These provisions include whether a committee employs a former staffer or family member of a candidate it supports, whether the candidate fundraises for the committee or is engaged in "strategic discussions" with it, whether the candidate and the committee retain a common vendor, and whether the candidate or the candidate's agents requested or suggested the communication, among others. In addition, super PACs will be subjected to clearer rules governing their relationship with individual candidates, and certain political consultants will need to register with the state.  The legislation will also require a broader array of advocacy organizations to disclose their donors to the state, which will, in turn, be allowed to release this information to the public.

Significantly, the legislature took a first step towards amending the state constitution to force officials to forfeit their pensions if convicted of a felony related to their public position. Limited to elected officials and high-level appointees, such as agency heads, the amendment must pass in the next legislative session and then be approved by public referendum.

Ultimately, the highest priority reforms pushed by public interest groups— including legislation closing the "LLC loophole," limiting donations to "housekeeping accounts," and addressing legislators' and legislative employees' outside employment income, were not addressed this legislative session.

Health care

In the final hours of the 2016 session, legislative leaders also stuck a deal that creates a special designation for public hospitals in order to provide them with increased medical assistance rates. The legislation also includes federally designated critical access hospitals (CAHs) and sole community hospitals (SCHs), bringing many upstate hospitals under the legislation's umbrella.

Plastic bag fee

In an unusual step, the New York State Senate approved a bill in early June that would have overturned a recently passed New York City law imposing a five-cent plastic bag fee citywide. Debate on the bill, which was sponsored by Brooklyn Senator Simcha Felder (D), centered on questions of home rule and the burden the fee would impose on low-income New York City residents. The Assembly ultimately held off calling for a vote on the bill after City Council Speaker Melissa Mark-Viverito (D) struck an agreement with Assembly Speaker Carl Heastie (D) to delay imposing the fee until February. The fee was supposed to go into effect in October. Earlier this week, the New York City Council passed legislation pushing the bag fee's effective date to February 2017.

Mayoral control of NYC schools

The biggest sticking point during the final days of the legislative session surrounded New York City school mayoral control. Mayor Bill de Blasio's control over the city's public schools was set to expire at the end of June 2016. In the weeks leading up to the expiration date, various parties debated a number of issues surrounding a possible extension, in particular how long to extend mayoral control and whether any additional oversight provisions should be included in the extension. Ultimately, the Mayor, who sought a simple three-year extension of the current law, once again found a tough audience in Albany, particularly among Senate Republicans. After intense negotiations, the legislature and Governor Cuomo agreed to a one-year extension that included requirements that the city publish on its website and make otherwise available to parents and the public information on spending and budgets for "community school districts." With the passage of a mere one-year extension of mayoral control, the table is now set for another battle over the issue in June 2017, this time right in the middle of Mayor de Blasio's reelection campaign.

The compromise deal also allows high-performing charter schools to choose their charter authorizers, giving them the option of staying with the city's Education Department or become part of the State University of New York (SUNY) or the Board of Regents systems.

Zombie Properties

A significant, albeit lower-profile, agreement that passed in the waning hours of the legislative session takes aim at the state's so-called "zombie" property problem, referring to properties that are stuck in the often protracted foreclosure process. The legislation creates a state registry for such homes which will be managed by the state Department of Financial Services (DFS), and requires the foreclosing banks to maintain the zombie properties or pay a fine of $500 per day.

If anyone has any questions or needs assistance related to the agreements from the close of the state legislative session outlined above, please feel free to contact Craig Johnson, Amy Solomon or Benjamin Kern.

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